In summary, the operation of the civil law, including
defamation claims, has been much reviewed in recent years, often
at the Government's instigation, leading to some concern that
there has been review at the expense of action. The publication
of the draft Bill represents a welcome indication that long overdue
legislation is finally to be delivered. We hope that this intention
is realised. (Paragraph 6)

We note that the Government's response to the recent
very public clash between a privacy injunction and parliamentary
privilege was to establish a committee to consider these issues.
This does not absolve the Government of its responsibility to
develop a coherent and principled vision for what should be the
interaction of the rights of privacy, reputation and freedom of
expression rather than finding itself buffeted by successive tabloid
or online revelations and controversial court decisions. (Paragraph
13)

CORE PRINCIPLES

Freedom of expression/protection of reputation: some
aspects of current law and procedure should provide greater protection
to freedom of expression. This is a key foundation of any free
society. Reputation is established over years and the law needs
to provide due protection against unwarranted serious damage;

Reducing costs: the reduction in the extremely high
costs of defamation proceedings is essential to limiting the chilling
effect and making access to legal redress a possibility for the
ordinary citizen. Early resolution of disputes is not only key
to achieving this, but is desirable in its own rightin
ensuring that unlawful injury to reputation is remedied as soon
as possible and that claims do not succeed or fail merely on account
of the prohibitive cost of legal action. Courts should be the
last rather than the first resort;

Accessibility: defamation law must be made easier
for the ordinary citizen to understand and afford, whether they
are defending their reputation or their right to free speech;
and

Cultural change: defamation law must adapt to modern
communication culture, which can be instant, global, anonymous,
very damaging and potentially outside the reach of the courts.

PARLIAMENT AND FREEDOM OF EXPRESSION

We recommend that the Government has particular regard
to the importance of freedom of expression when bringing forward
this Bill and developing proposals in its broader consideration
of the law relating to privacy. (Paragraph 18)

Substance of the draft Bill

IMPROVING CLARITY OF THE LAW

The Government should monitor whether, in due course,
the codification carried out by the Bill is achieving its goal
of improving accessibility and clarity of the law. (Paragraph
20)

It is essential that the Government makes clear,
in a way that the courts can take into account, during the passage
of the Bill if not before, when it is seeking to make changes
of substance to the law and when it is simply codifying the existing
common law.We have sought to make this distinction clear
in the specific changes to the draft Bill that we propose. In
future, we recommend that the Government always makes clear at
the date of publication whether the clauses of a draft Bill are
intended merely to codify the existing law, or to codify with
elements of reform. There should be no ambiguity over this important
issue. (Paragraph 21)

TRIAL BY JURY

We conclude that the presumption in favour of jury
trials works against our core principles of reducing costs by
promoting early resolution and, to a lesser degree, of improving
clarity. We support the draft Bill's reversal of this presumption,
so that the vast majority of cases will be heard by a judge. (Paragraph
24)

We believe that the circumstances in which a judge
may order a trial by jury should be set out in the Bill, with
judicial discretion to be applied on a case-by-case basis. These
circumstances should generally be limited to cases involving senior
figures in public life and ordinarily only where their public
credibility is at stake. (Paragraph 25)

IMPROVING PROTECTION OF FREEDOM OF SPEECH

We recommend replacing the draft Bill's test of "substantial
harm" to reputation with a stricter test, which would have
the effect of requiring "serious and substantial harm"
to be established. (Paragraph 28)

The threshold test should be decided as part of the
proposed early resolution procedure and any claim that fails to
meet this test should be struck out. (Paragraph 29)

RESPONSIBLE JOURNALISM IN THE PUBLIC INTEREST

When deciding whether publication was responsible,
the court should have regard to any reasonable editorial judgment
of the publisher on the tone and timing of the publication. (Paragraph
35)

The judge who upholds a public interest defence should
make it clear when the truth of the allegation is not also proven.
It may be appropriate, depending on the facts of the case, for
the judge to order a summary of his or her judgment to be published,
to make this clear. This would help to protect the reputation
of the claimant, but without the practical and legal complications
associated with declarations of falsity. The Ministry of Justice
should work with the Lord Chief Justice and senior members of
the judiciary to implement this reform. (Paragraph 36)

On balance, we support the broad approach that is
taken by the Government to the public interest defence, although
in some detailed respects we prefer the approach of Lord Lester's
Bill. (Paragraph 37)

PROTECTING THE TRUTH

We recommend that the name of the "truth"
defence be changed to "substantial truth". [...] We
recommend that the Government includes Lord Lester's provision
as to what is required to prove the truth of a single allegation.
(Paragraph 38)

We recommend that a court presiding over a defamation
case should be given the power to order the defendent to publish,
with proportionate prominence, a reasonable summary of its judgment.
(Paragraph 40)

FREEDOM TO EXPRESS OPINIONS

We support the Government's proposal to place the
defence of honest opinion on a statutory footing as part of the
draft Bill. We are not, however, persuaded that the draft Bill
makes the law clearer, simpler or fairer to the ordinary person
than it is at present. As a result, we recommend a series of amendments
to the draft Bill. (Paragraph 43)

ABSOLUTE AND QUANTIFIED PRIVILEGE

Academic and scientific debate

We recommend that a provision is added to the draft
Bill extending qualified privilege to peer-reviewed articles in
scientific or academic journals. (Paragraph 48)

We recommend that the Government prepares guidance
on the scope of this new type of statutory qualified privilege
in consultation with the judiciary and other interested parties.
(Paragraph 49)

Protecting the democratic process

We recommend adding a provision to the Bill which
provides the press with a clear and unfettered right to report
on what is said in Parliament and with the protection of absolute
privilege for any such report which is fair and accurate. (Paragraph
51)

We recommend that the Government adds a provision
in the Bill protecting all forms of communication between constituents
and their MP (acting in his or her official capacity as an MP)
by qualified privilege. (Paragraph 52)

LIBEL TOURISM

We believe that the extent of libel tourism has been
exaggerated in some quarters but, in line with our core principle
of protecting freedom of speech, we believe that the courts would
benefit from more robust powers to prevent unwarranted legal action
in this country. This would also help reduce any international
chilling effect. Foreign parties should not be allowed use of
the courts in this country to settle disputes where the real damage
is sustained elsewhere or where another jurisdiction is more appropriate.
We therefore support the thrust of the Government's proposals
but require some modifications, particularly to clarify that residents
of England and Wales are not prevented from taking action here
against an overseas defendant for damage caused abroad where the
current law permits it. [...] We recommend that the Government
should provide additional guidance on how the courts should interpret
the provisions relating to libel tourism. We also believe that
in such cases the courts should have regard to the damage caused
elsewhere in comparison to the damage caused here. (Paragraph
56)

FURTHER PROTECTION FOR PUBLISHERS

Single publication rule

In our view the single publication rule should protect
anyone who republishes the same material in a similar manner after
it has been in the public domain for more than one year. Further,
the Government must clarify that merely transferring a paper-based
publication onto the internet, or vice versa, does not in itself
amount to republishing in a "materially different" manner,
unless the extent of its coverage in the new format is very different.
(Paragraph 59)

Innocent dissemination

We recommend that the Government amends the "innocent
dissemination" defence in order to provide secondary publishers,
such as booksellers, with the same level of protection that existed
before section 1 of the Defamation Act 1996 was introduced. (Paragraph
60)

RECOMMENDED CHANGES TO THE DRAFT BILL

Clause 1: Substantial harm

We recommend replacing the draft Bill's test of "substantial
harm" to reputation with a stricter test, which would have
the effect of requiring "serious and substantial harm"
to be established. (Paragraph 62)

Clause 2: Responsible publication on matter of
public interest

The Reynolds defence of responsible journalism in
the public interest should be replaced with a new statutory defence
that makes the law clearer, more accessible and better able to
protect the free speech of publishers. The Bill must make it clear
that the existing common law defence will be repealed. (Paragraph
63)

Overall, we support the approach that is taken in
clause 2 of the Bill. In particular, we agree that the term "public
interest" should not be defined. [...] The list of factors
that is used to determine whether a publisher has acted responsibly
should be amended as follows:

a) A new factor should be added that refers to
the "resources" of the publisher;

b) A reference to "the statement in context"
should be added to clause 2(1)(c);

c) The term "urgency" should be removed
from clause 2(1)(g) and replaced with a more general test of whether
"it was in the public interest for the statement to be published
at the time of publication";

d) The reference to whether the publication draws
"appropriate distinctions between suspicions, opinions, allegations
and proven facts" at clause 2(1)(h) should be removed; and

e) When deciding whether publication was responsible,
the court should have regard to any reasonable editorial judgment
of the publisher on the tone and timing of the publication. (Paragraphs
64 and 65)

We recommend that the "reportage" defence
at clause 2(3) is reformulated as a new matter to which the court
may have regard under clause 2(2) namely "whether it was
in the public interest to publish the statement as part of an
accurate and impartial account of a dispute between the claimant
and another person." (Paragraph 66)

Clause 3: Truth

We recommend that the name of the "truth"
defence be changed to "substantial truth" which better
describes the nature of the test that is applied. We also recommend
that the Government includes a provision, in line with Lord Lester's
approach, to make clear that a defamation claim should fail if
what remains unproved in relation to a single allegation does
not materially injure the claimant's reputation with regard to
what is proved. This should assist in providing clarity. (Paragraph
67)

The Bill should be amended, if necessary by a new
clause, to provide the judge deciding a defamation case at final
trial with the power to order the defendent to publish, with proportionate
prominence, a reasonable summary of the court's judgment. In cases
where media and newspaper editors are responsible for implementing
such orders they should ensure that the summary is given proportionate
prominence. (Paragraph 68)

Clause 4: Honest Opinion

We support the Government's proposal to place the
defence of honest opinion on a statutory footing, subject to the
following amendments:

a) The term "public interest" should
be dropped from the defence as an unnecessary complication;

b) The Bill should not protect "bare opinions".
It should be amended to require the subject area of the facts
on which the opinion is based to be sufficiently indicated either
in the statement or by context;

c) Neither the Government's draft Bill nor Lord
Lester's Bill imposes any requirement that the commentator need
know the facts relied on to support the opinion. In line with
our concern to improve clarity, we welcome this change, which
removes an undesirable layer of complexity;

d) The Bill should require the court, when deciding
whether an honest person could have held the relevant opinion,
to take into account any facts that existed at the time of publication
which so undermine the facts relied on that they are no longer
capable of supporting the opinion;

e) The Bill should require the statement to be
recognisable as an opinion, in line with Lord Lester's Bill; and

f) The vague reference to "privilege"
must be clarified to make it clear that this term is confined
to the absolute or qualified privilege which presently attaches
at common law or by statute to the fair and accurate reporting
of various types of public proceedings or notices. (Paragraph
69)

Clause 5: Privilege

Qualified privilege should be extended to fair and
accurate reports of academic and scientific conferences and also
to peer-reviewed articles appearing in journals. (Paragraph 70)

Clause 6: Single publication rule

The single publication rule should protect anyone
who republishes the same material in a similar manner after it
has been in the public domain for more than one year. It should
be clarified that the simple act of making a paper-based publication
available on the internet, or vice versa, does not in itself amount
to republishing in a "materially different" manner.
(Paragraph 71)

Clause 7: Action against a person not domiciled
in the UK or a Member State etc

The Bill should make clear that residents in England
and Wales may sue in this jurisdiction in respect of publication
abroad provided there has been serious and substantial harm suffered
by them. In particular, this section should not be applicable
to residents of England and Wales who wish to sue in respect of
publication abroad where there is permission under the current
law. The clause should be confined to foreign parties using English
courts to resolve disputes where the principal damage has not
been suffered here. In line with the Lord Lester Bill, the courts
should be required, when determining this issue, to assess the
harm caused in this country against that caused in other jurisdictions.
(Paragraph 72)

Clause 8: Trial to be without a jury unless the
court orders otherwise

There should be added provisions setting out the
circumstances in which a trial by jury may be ordered. These circumstances
should generally be limited to cases involving senior figures
in public life and ordinarily only where their public credibility
is at stake. (Paragraph 73)

Consultation issues

Early resolution and cost control

The Government's proposal

We agree with the Government's intention of promoting
early resolution by allowing the judge to determine key issues
in question at an initial hearingwithin a few weeks, certainly
not monthsand believe that this will go a significant way
towards improving the chances of early resolution. (Paragraph
77)

The changes to procedures proposed by the Government
are largely a tightening up of existing mechanisms: they cannot
be seen as radical and do not go far enough towards reducing costs
to the extent that legal action will be realistically accessible
to the ordinary citizen. (Paragraph 78)

A new approach

We propose an approach which is based upon strict
enforcement of the Pre-Action Protocol governing defamation proceedings,
and has three elements: a presumption that mediation or neutral
evaluation will be the norm; voluntary arbitration; and, if the
claim has not been settled, court determination of key issues
using improved procedures. (Paragraph 79)

Initial stages of action: mediation or evaluation

We believe that ordinarily the first step following
the initial exchange of letters under the Pre-Action Protocol
should (in the absence of an offer of amends) be mediation or
assessment by a suitably qualified third party, known as "early
neutral evaluation".[...] The mediation process must be swift,
inexpensive and resistant to delaying tactics. To counter this
latter possibility, any failure to engage constructively with
the process should be punished if and when it comes to the awarding
of costs. If there has been no mediation or neutral evaluation,
the judge should have power to order it at the first hearing in
the case. (Paragraph 82)

Arbitration

We encourage the Government to explore further the
development of a voluntary, media-orientated forum for dispute
resolution in the context of the current review of the regulatory
regime governing the media. (Paragraph 84)

Arbitration represents a cost-effective alternative
to the courts, and helps to reduce the impact of any financial
inequality between the parties. The financial and other incentives
to use arbitration must be strengthened as far as possible. (Paragraph
85)

Proceedings reaching court

To bring costs down further, more radical changes
to the way in which our courts operatenot just in defamation
caseswould need to be contemplated. Some suggestions include
the application of maximum hourly rates, mandatory capping of
recoverable costs, paper hearings with limits on written submissions
and changes to the Conditional Fee Agreement regime. Such issues
extend well beyond our brief. Nevertheless, we recommend that
the Government gives serious consideration to these and other
measures, which are essential if court costs are to be attacked
in a more radical and effective way. In the meantime, we believe
that more aggressive case management can help to minimise costs,
if it is applied fairly and consistently. We recommend that the
Ministry of Justice and the judiciary take measures to ensure
that judges personally and consistently manage defamation cases
in a robust manner that minimises delays and costs incurred by
both parties. (Paragraph 86)

Reform of civil litigation costs and access to
justice

It is outside our remit to explore the impact of
the Government's separate proposals on civil litigation costs
reform in detail. Nonetheless we are sufficiently concerned about
them to ask the Government to reconsider the implementation of
the Jackson Report in respect of defamation actions, with a view
to protecting further the interests of those without substantial
financial means. (Paragraph 89)

Conclusions on Procedural reform

We recommend that the Ministry of Justice prepares
a document setting out in detail the nature of the rule changes
required to ensure that the Civil Procedure Rule Committee will
implement the procedural changes we recommend in this section
of our Report. This document should be published at the same time
as the Bill. (Paragraph 91)

PUBLICATION ON THE INTERNET

Introduction

We acknowledge the challenges that any national legislature
faces when acting alone in relation to a global issue but do not
regard these as an excuse for inaction. ...Specifically, we propose:

a) A new notice and take-down procedure to cover
defamation in the online environment; and

b) Measures to encourage a change in culture
in the way we view anonymous material that is user-generated,
including via social media. (Paragraph 93)

Social networking, online hosts and service providers

We recommend that the Government takes action by:

Ensuring that people who are
defamed online, whether or not they know the identity of the author,
have a quick and inexpensive way to protect their reputation,
in line with our core principles of reducing costs and improving
accessibility;

Reducing the pressure on hosts and service providers
to take down material whenever it is challenged as being defamatory,
in line with our core principle of protecting freedom of speech;
and

Encouraging site owners to moderate content that
is written by its users, in line with our core principle that
freedom of speech should be exercised with due regard to the protection
of reputation. (Paragraph 100)

Contributions published on the internet can be divided
into those that are identifiable, in terms of authorship, and
those that are unidentified, as described above. In respect of
identified contributions, we recommend the introduction of a regime
based upon the following key provisions:

a) Where a complaint is received about allegedly
defamatory material that is written by an identifiable author,
the host or service provider must publish promptly a notice of
complaint alongside that material. If the host or provider does
not do so, it can only rely on the standard defences available
to a primary publisher, if sued for defamation. The notice reduces
the sting of the alleged libel but protects free speech by not
requiring the host or service provider to remove what has been
said; and

b) If the complainant wishes, the complainant
may apply to a court for a take-down order. The host or service
provider should inform the author about the application and both
sides should be able to submit brief paper-based submissions.
A judge will then read the submissions and make a decision promptly.
Any order for take-down must then be implemented by the host or
service provider immediately, or they risk facing a defamation
claim as the publisher of the relevant statement. The timescale
would be short and the costs for the complainant would be modest.
(Paragraph 104)

We recommend that any material written by an unidentified
person should be taken down by the host or service provider upon
receipt of complaint, unless the author promptly responds positively
to a request to identify themselves, in which case a notice of
complaint should be attached. If the internet service provider
believes that there are significant reasons of public interest
that justify publishing the unidentified materialfor example,
if a whistle-blower is the sourceit should have the right
to apply to a judge for an exemption from the take-down procedure
and secure a "leave-up" order. We do not believe that
the host or service provider should be liable for anonymous material
provided it has complied with the above requirements. (Paragraph
105)

The Government needs to frame a coherent response
to the challenge of enforcing the law in an online environment
where it is likely to remain possible to publish unidentified
postings without leaving a trace. As part of doing so, the Ministry
of Justice should publish easily accessible guidance dealing with
complaints about online material. We recommend that the Government
takes the necessary steps to implement the approach we outline.
(Paragraph 107)

CORPORATIONS

It is unacceptable that corporations are able to
silence critical reporting by threatening or starting libel claims
which they know the publisher cannot afford to defend and where
there is no realistic prospect of serious financial loss. However,
we do not believe that corporations should lose the right to sue
for defamation altogether.[...] We favour the approach which limits
libel claims to situations where the corporation can prove the
likelihood of "substantial financial loss". (Paragraph
114)

We make the following additional observations:

The test of "substantial
financial loss" should focus on whether there has been, or
is likely to be, a substantial loss of custom directly caused
by defamatory statements;

In our view, neither mere injury to goodwill
nor any expense incurred in mitigation of damage to reputation
should enable a corporation to bring a libel claim;

A corporation should not be entitled to rely
on a fall in its share price to justify bringing a libel claim;
and

Where a trading corporation can prove a general
downturn in business as a consequence of a libel, even if it cannot
prove the loss of specific customers or contracts, this will suffice
as a form of actual loss (albeit unquantified). (Paragraph 115)

Corporations should be required to obtain the permission
of the court before bringing a libel claim. (Paragraph 116)

The Ministry of Justice and the courts must be determined
and creative in preventing corporations from using the high cost
of libel claims to force publishers into submission. The requirement
for a corporation to obtain prior permission before bringing a
libel claim provides the perfect opportunity to control the corporation's
recoverable legal costs before they get out of hand, whether through
cost capping or otherwise. Judges must redouble efforts to make
the most of their case management powers by reducing the inequality
of wealth that can exist between corporations and publishers.
(Paragraph 117)

Our proposal to introduce a test of "substantial
financial loss" applies only to corporations or other non-natural
legal persons that are trading for profit; it does not extend
to charities or non-governmental organisations. [...] Trade associations
that represent for-profit organisations should be covered by the
new requirements that we propose. (Paragraph 118)